Minority report

Yesterday’s published minutes of the Bank of England’s last Monetary Policy Committee meeting give us a lesson in media studies and organisational dynamics.

When the Bank produced its inflation report last week, most media attention focused on the downbeat comments of Governor Mervyn King at the press conference. There was very little coverage of the fact that the MPC had actually raised its growth forecasts from those in the May report (from memory, I think the Indy and the FT each had someone smart and/or diligent enough to notice).

Anyway, the minutes of the MPC meeting at the start of the month now reveal that a minority of members – including King – had wanted a bigger extension to the quantitative easing stimulus programme, implying that they took a gloomier view of the economy’s prospects. This view, it seems clear, was reflected in King’s statements at the press conference to a greater degree than was the agreed MPC projection.

This tells us two things: when one person is in the privileged position of presenting the views of a group, be wary of their own views colouring what they say; and always read the small print, or at least question whether the people who are informing you have read the small print. The inflation report very clearly says, on page 7: “The projected distribution for GDP growth is somewhat stronger than in the May Report, reflecting the increased monetary stimulus. The probability of activity contracting for a further sustained period is judged to have fallen.”